KGI Asia Commentary

2023.06.16 09:00

HSI rose 420 points on Thursday

The Hang Seng Index rose 420 points or 2.2% to 19,828 on Thursday. HSTECH rose 145 points or 3.6% to 4,198 and HSCEI rose 195 points or 3.0% to 6,772. Daily market turnover was HK$121.4bn.

S&P 500 and Nasdaq rise for sixth straight day as traders hope Fed's rate hike cycle is coming to an end

The Dow ended higher on Thursday as a tech rally showed no sign of stopping after U.S. Treasury yields slipped, with weak jobs data raising hopes that the Federal Reserve might not need to take a tough stance, as many feared. The Dow Jones Industrial Average rose 428 points, or 1.3%, the Nasdaq Composite rose 1.2%, and the S&P 500 rose 1.2%, hitting a 14-month high. U.S. Treasury yields slipped after data showed U.S. initial jobless claims jumped to their highest level in nearly two years. Big tech stocks were higher, with shares of Microsoft Corp and Meta Platforms up more than 3%, and energy stocks also had a big gain on the day, gaining more than 1% as China, the world's largest oil importer, cut interest rates on Thursday, sparking demand for the economy and oil optimism, which boosted confidence in oil prices.

Numbers of economic data released

Economic data released Thursday morning gave investors and policymakers a better look at the strength of the labor market and consumer spending. Initial jobless claims for the week ended June 10 came in slightly above estimates at 262,000, compared with expectations for 245,000. Despite signs of weakness in the labor market, the latest retail sales data unexpectedly rose 0.3%, suggesting that consumer conditions remain healthy.

Hong Kong Stock Connect had a net outflow of HK$7.2bn on Thursday, of which China Mobile (941) had the largest net inflow, reaching HK$0.38bn; followed by PetroChina (857). Tracker Fund (2800) recorded the largest net outflow at HK$4.8bn, followed by Meituan (3690).

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MNSO
09896

The group revenues grew to over RMB2.9 billion, an increase of 26% year-over-year. Revenue from China was RMB2.15bn, 18.1% higher than RMB1.82bn in the same period of 2022. The yoy increase was primarily driven by an increase of 25.3% in revenue from MINISO’s offline stores, which was the result of a 5.4% yoy increase in average store count and a yoy growth of 18.9% in average revenue per MINISO store in China. Its margin profile continued to beat expectations, gross profit margin reached 39.3%, over 900 basis points higher than that in the same period of 2022. Meanwhile, adjusted net profit margin expanded to 16.4%, an 11.7 percentage point increase compared to same period last year, and adjusted net profit grew to RMB483 million, an increase of 336% yoy. Both figures represent new all-time highs for MINISO. Average GMV per MINISO store during the Labor Day Holiday in China recovered to a comparable level of the same period in 2019. It reflects that its ability to acquire customers remained, and accelerating the pace of opening in the future can help increase profits. Driven by better store-level performance and store network expansion, with its margin profile continue to improve strongly on a year-over-year basis, it is expected that the Company can maintain its growth momentum in 2H23. Target price: $42; Stop- Loss price: $30.6.

Wen Kit Kenny is a SFC licensed person accredited to KGI Group to carry on regulated activities (for details, please refer to:https://apps.sfc.hk/publicregWeb/indi/AJF244/details). He and/or his associate do not have any financial interest in the recommended issuer or new listing applicant.

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